Bank-Insurance Mergers and Acquisitions (M&A) and Shareholders’ Value

  • Richard Mochoge Ondimu

Student thesis: Doctoral ThesisDoctor of Philosophy


This thesis investigates whether M&A between banks and insurance companies create or destroy shareholders' value using a global dataset spanning 1999 to 2019. The study makes three significant contributions to the literature. In Chapter 4, we find that the various forms of restructuring across the banking and insurance sectors have a differential impact on shareholders’ value. For instance, we find that focused acquisitions are wealth destroying whilst diversified acquisitions (bancassurance) enhance wealth but only for the owners of insurance companies. In contrast, except for instances when banks bid for insurance targets, we find evidence that other bank–insurance M&A generate wealth for the targets’ shareholders. Chapter 5 utilises the cross-sectional OLS to test the explanatory power of deal characteristics and firm-level variables to the announcement returns of acquirers and targets. The results show that abnormal returns cannot be explained by a single determinant but rather by several factors such as firm and deal characteristics, as well as the prevailing economic conditions in the target country. We find that leverage ratio as a proxy for free-cash flow and acquisition of publicly listed targets are negatively associated with acquirer returns while Tobin’s Q is positively associated with bidders' excess returns. Chapter 6 uses both logit and survival analysis to assess how internal governance structures influence the likelihood that bank–insurance M&A will be completed, as well as the time a deal takes to close after its initial announcement. The results suggest that internal governance can, to some extent, influence deal completion likelihood and the time-lapse between deal announcement and completion. Specifically, we find that the probability of a bank–insurance deal being completed quicker is higher if corporate boards are more independent, and lower if corporate boards are staggered. The study also finds that a large board size increases only the probability of completing a deal whereas CEO/Chair duality shortens the completion time. These findings contribute to the understanding of factors that would help managers to avoid deal abandonments and protraction in deal-making, as doing this would save firms from unnecessary frustration, financial and reputational loss.
Date of AwardMay 2022
Original languageEnglish
SupervisorRakesh Bissoondeeal (Supervisor), Agelos Delis (Supervisor) & Leonidas Tsiaras (Supervisor)


  • Bancassurance
  • Event study
  • M&A
  • Mergers and Acquisitions
  • Abnormal returns
  • Corporate governance

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